Polk Audio cuts back in city 20 are laid off

part of operation moving to San Diego

April 08, 1997|By Sean Somerville | Sean Somerville,SUN STAFF

Polk Audio Inc. yesterday said it laid off about 20 Baltimore employees as part of a restructuring that will move Baltimore warehousing, servicing and manufacturing jobs to San Diego.

The restructuring, to be completed within 90 days, will leave Polk with about 100 employees in its Baltimore headquarters.

"I think our situation is that business conditions in our market have become difficult," said George Klopfer, Polk chief executive officer. "Quality and efficiency is more important than ever."

The company announced the restructuring together with news of disappointing sales. Polk said its sales for the fourth fiscal quarter ended March 30 were $13.2 million, down 27 percent from the year-ago period. The company said the restructuring will result in a modest loss for the quarter.

`We were anticipating that sales for March of this year would not equal those of last March, when we made very substantial initial deliveries of the Eosone product line to Best Buy," Klopfer said. "That said, we nevertheless were disappointed with the overall sales results for the March 1997 quarter."

Klopfer said Polk has been operating two warehouses, one in San Diego and one in Baltimore. "We concluded that the one in Maryland was not needed," he said. The warehouse employs about 14 people and the servicing department about six, he said. In addition to eliminating those jobs, Polk is moving its last two or three Baltimore manufacturing jobs to San Diego. Those workers produce the high-end SRT, or the Signature Reference Theater, Klopfer said.

The restructuring continues the departure of Polk jobs from Baltimore. About two years ago, Polk announced that it was eliminating most speaker production here and shifting it to Tijuana, Mexico.

The main reason for the action: Polk's U.S. workers receive an average of $14 an hour in wages and benefits, while Mexican workers get about $2 an hour. Today, Polk manufactures virtually all of its products in Mexico.

Yesterday, Klopfer said the remaining Baltimore employees will continue to work in product development, sales and marketing and the company's headquarters. "We certainly have no plans to move it," he said. Polk stock fell $1.125 yesterday to $8.50.

Pub Date: 4/08/97

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.